MARCH 2017 BAD FAITH CASES: COMPLAINT ADEQUATE WHERE INSURED PLEADED THAT INSURER MADE UNREASONABLE SETTLEMENT OFFER, IGNORED SETTLEMENT DEMANDS, AND FAILED TO EXPLAIN LOW SETTLEMENT OFFER (Middle District)

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In this uninsured motorist case, the insured asserted bad faith and pleaded, among other things, that the insurer provided an unreasonable settlement offer instead of paying benefits when it should have paid them, ignored correspondence and settlement demands/offers, and refused to provide justification of how it calculated its settlement offer. The insurer moved to dismiss on the basis that these were conclusory allegations that could not survive Twombly/Iqbal.

The court refused to dismiss the case. It found there were “enough facts to raise a reasonable expectation that discovery will reveal evidence of each necessary element of the claims alleged in the complaint.”

Specifically, the court focused on the allegations that the insurer made an “unreasonable settlement offer when it should have paid the benefits due to Plaintiff. … That Defendant ignored correspondence and settlement demands/offers by Plaintiff on many occasions. … And that Defendant refused to provide Plaintiff with the justification for, the basis of, or the method of how it calculated its low settlement offer.” These allegations were sufficient to allow the case to move forward into the discovery phase.

Date of Decision: January 12, 2017

Hughes v. State Farm Mut. Auto. Ins. Co., No. 16-2240, 2017 U.S. Dist. LEXIS 4852 (M.D. Pa. Jan. 12, 2017) (Kosik, J.)

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